Right now, the sentiment is such where to keep the extremely efficient machine that we have, and again, you can see that in the very short tROI, and you can see that in the growing LTV to CAC ratios over time that this strategy actually works.
Ofer Katz: And I think that just to augment on what Micha said, I think that we have proven to improve margin in a sunny day and a rainy day. And I think the plan is to continue this path. There’s a long-term EBITDA margin ahead of us, and we’re getting there.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Matt Farrell from Piper Sandler.
Matt Farrell: Thanks, guys, for letting me ask the question. Two, if I may. The first one, the Q4 guidance range is much wider than you normally provide for a given quarter. You kind of hinted at the uncertainty you’re seeing. Could you walk us through the assumptions? Or just how to think about you getting to the high-end of the range? And what would happen to get to the low-end of the range? My second question is, I know you’re not going to provide any quantitative commentary on next year, but would love to hear some of the strategic priorities for 2024 across various parts of the business. Thanks.
Ofer Katz: So, thank you, Matt, on the question. I think on the first part, on the guidance, we noted the volatility that we’ve been seeing the first few weeks of this quarter. And we guide based on the assumption that the risk of volatility will retain into the next few weeks. So, based on that, it might be that volatility will create headwinds or the other way. And based on the uncertainty, we kind of increased the range to make sure that investors will get the full picture of what we are seeing and the operating plan has been adjusted accordingly. In terms of the — 2024 has even wider uncertainty, because it’s still a way to go. And we obviously, will speak about numbers early next year. And I’ll let Micha to go through the strategic profile of 2024.
Micha Kaufman: Yeah. So, on priorities for 2024, I would say that a lot of what we’ve been doing throughout the years have been paying off well. And there’s a few specific things when it comes to next year. So, continuing on my previous comment, given the macro environment, going upmarket is a strategic move and target for us. And at least until macro changes, this is the center of focus. The other one that I can call out is AI integration, both internally as a team and how it makes us move faster, more efficient, but also in our products to make the lives of our customers better and get what they’re trying to do faster. On the same note, pretty much, catalog expansion is extremely important as we’re seeing so many different — so many new areas of professionalism appear as the landscape changes.
And so, continuing to expand the catalog and ensure that we add the necessary categories and skills to the catalog is important. International expansion is another one. I think 2023 has been very successful in that front and we’ve been — I think the playbook or the playbooks that we’ve been developing have been paying off and we’re seeing regions where we’re doubling-down growing much faster than the average growth of the marketplace. Team excellence is an ongoing investment. And lastly, I would just generally call consistently looking for growth opportunities, both organically and inorganically.
Operator: Thank you. One moment for our next question. Our next question comes on the line of Kunal Madhukar from UBS.
Kunal Madhukar: Hi, thank you for taking my questions. Two, if I could. One, on the take rate. Given your focus towards going up market and the increasing adoption of Neo, how do you think that impacts the take rate insofar as it relates to Promoted Gigs or Seller Plus? And then, in terms of volatility on the revenue side, can you help us understand, you are a global company. And so, is demand across the globe kind of volatile, or is it in specific areas? And similarly on the seller side, is the supply affected across the globe, or is it just in specific areas? Thank you.
Micha Kaufman: Thank you. Good morning. So, if I understand the question about take rate, as I said earlier, it is sustainable as we’ve been proving quarter after quarter with no exceptions. And there is still upside. You called out Promoted Gigs and Seller Plus, both are growing programs. And they keep growing quarter after quarter. So, I don’t think — I’m not sure what’s the connection to Neo, but essentially we don’t see them shrinking or being impacted by the new technologies. And obviously, there’s ways of integrating Promoted Gigs and solutions like that within our new products as well. In terms of the second question about volatility on revenue, we’re a global company and that is correct. And obviously, some regions as a result of war activities, we’ve seen the same with Ukraine before, and we’re seeing it now in the Middle East, become volatile.
And sometimes it’s very short periods of time, and sometimes it’s slightly longer. This is why we called it out. And we said that most of this has been subsided. However, since wars, by definition, are dynamic events, it is really hard to forecast how this would evolve, and this is why we’re putting a bit of cautious into anything.
Kunal Madhukar: Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Andrew Boone from JMP Securities.
Andrew Boone: Good morning, guys. I’d also just like to echo my thoughts about thinking about you all. On take rates, I understood that that’s a trailing 12-month metric, and it stepped up almost 1 point in the last two quarters. So, is there anything that you guys can disclose in terms of the take rate as it’s at in 3Q ’23? Meaning, did we have a significant step-up and we’re plateauing from here, but we’ll see it in the figures as that trailing 12-months catches up to 3Q, or how do we think about just the increase over the last couple quarters, and then how do we play that going forward?
Ofer Katz: So, Andrew, this is Ofer. I think we mentioned that in the prepared remarks, the take rate is driven by Promoted Gigs and Seller Plus. Those are the two different programs that we are expanding for — over a few quarters now. Micha mentioned earlier that Seller Plus has more than 25,000 subscribers, which is more than double the number of subscribers we had end of last year. So, I think on both of these programs, I think a very good retention. And Seller Plus, we now run two different deals, two different offering, different pricing. And I think the plan on both program of Seller Plus and Promoted Gigs is to further expand because there is a room. We just opened the Promoted Gigs into mobile. So, there is more asset for us to monetize again and there’s more value to assist seller on the marketplace to better monetize their skills and time, which is why the adoption rate and the retention is steady and growing, and we plan to expand it over the next few quarters.
Andrew Boone: Thanks for that. And then I wanted to ask about brand marketing specifically. How do — you guys just launching new U.S. campaign. How do we think about brand marketing as a component of sales marketing? And how that has trended just given the more difficult macro environment? Thanks so much.
Micha Kaufman: Thank you. So, we, for many reasons, mostly competitive. We’re not providing an accurate breakdown between brand and performance marketing. However, as evidence in what we’re doing around the world, not just in the U.S., this is an area where we’re definitely continuing to invest. It’s a long-term investment, and one that goes hand-in-hand with performance. So, to us, it’s really the funnel that supports the brand and the brand supports the performance. And this is why depending on new categories that we enter, new areas of interest for us, trends in the market that define how we break down between brand and performance. I hope this gives a little bit of color.
